Tuesdsy, July 21, 2020
By FSDH Research
Market Insight- The Nigerian equities market continued to remain under pressure. Both, the All-Share Index and the NSE-30 Index Ltraded lower today with All-Share Index (ASI) YTD return settling at -9.94 percent. Performance across the sectors was broadly negative except for the Oil & Gas sector, which remained unchanged. The prominent losers were the Industrial (-1.57 percent) and Insurance (-0.93 percent) sectors, while the Banking (-0.07 percent) and Consumer goods (-0.06 percent) sectors also recorded losses. The market may remain volatile in the near term. We advise investors to buy quality stocks with a medium to long term investment horizon.
Market Brief
- The Nigerian equity market closed on a negative note today, as All Share Index decreased by 0.39 percent to close at 24,174.45 points.
- The market cap of equities listed on the NSE declined to ₦12.611 trillion from ₦12.660 trillion
- Market breadth was positive with 14 gainers as against 10 losers
NSE 30
- The NSE 30 Index decreased by 0.49 percent
- Nigerian Breweries and Custodian Investment Plc were the key gainers, while International Breweries and Dangote Cement were the key losers.
Money Markets
- The Overnight (O/N) rate declined by 7.87 percent to close at 2.80 percent
- The Open Buy Back (OBB) rate also declined by 7.07 percent to close at 2.10 percent
Money market rates dropped by an average of 747 bps, as the system liquidity improved following OMO maturities worth ₦25.36 billion.
FX
I&E FX window observed relatively subdued volume passing through the market, as it remains affected by tightened system liquidity. Naira appreciated marginally by 0.08 percent as the dollar was quoted at ₦388.17 as compared to ₦388.50 on the previous day. Most participants maintained bids between ₦360.00 and ₦390.00 per dollar.
Treasury Bills
- NT-bills market closed on a positive note today, with average yield across the curve declining by 18 bps to close at 1.75 percent
- In the OMO bills market, average yield across the curve declined by 49 bps to close at 5.11 percent
Bond Markets
- The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 8 bps to close at 4.31 percent
Tomorrow, the DMO is expected to offer FGN Bonds worth ₦130 billion in the Primary Market Auction through re-opening of 10-year (₦25 billion), 15-year (₦35 billion) & 30-year (₦35 billion) tenors and a new issue of a 25-year tenor bond (₦35 billion). Hence, we anticipate that the secondary bond market will remain quiet as investors would focus on the Primary Market Auction. However, we expect increased activity in the secondary bond market towards the end of the week.